AR Financing for First-Timers

Invoice financing can provide you with fast capital when you have an opportunity, but it can also be an ongoing cash flow management strategy. Whether you are considering it as a single-use financing source or an ongoing one, the application is the same, especially your first time out. For first-timers, it can be disorienting even though it is simpler than a loan application, just because it is quite a bit different. Here is everything you need to know to successfully navigate your first accounts receivable financing deal.

How Fast Can You Get Cash in Hand?

The application process for AR financing is incredibly fast when compared to term loans for business assets or even home mortgages. In most cases, approvals are done and deals are concluded in three to five business days. The application process tends to be a little interactive, though, so be on the lookout for requests for more information or other communications beyond a simple approval or denial. The faster you respond, the faster you get your money.

What Does It Take To Get Approved for Financing?

The great news is that accounts receivable financing is incredibly easy to access if you have invoices on hand that has not been paid. The work has to be completed and the cash owed for an invoice to qualify, and the lender is also going to be concerned with the customer’s payment history. If you have the invoices and your ledger says your customers pay on time almost all the time, you can usually count on financing even with no business credit score on file.

How Does Invoice Financing Affect Your Business Credit Score?

AR financing does not affect your credit score under normal circumstances because most invoice financing agreements are non-recourse. Even then, there is likely to be no impact because the advance is against money owed to you, you are not directly responsible for putting cash in the lender’s hands. This can be a mixed blessing because that means it does not help you build a credit score, but it also does not affect any other loan applications you have out that might consult the score.

How To Apply for Financing

Generally, accounts receivable financing involves just a short custom application from the lender and the submission of the financial paperwork to substantiate your invoices. For more information about lender specifics, it is always a good idea to consult the program’s application requirements page or to send an email to a lender representative.


Leave a Reply